Month: February 2017

Scottish Labour is to demand crisis-hit North Sea oil platforms are nationalised in a move that could cost taxpayers millions of pounds.

The party is expected to call for the state to step in by bringing key assets into temporary public ownership to prevent oil and gas reserves being “turned off prematurely”.

More than 100,000 workers in the sector are feared to have lost their jobs following the collapse in prices.

A motion to be discussed at the Scottish Labour conference in Perth on Friday urges both Holyrood and Westminster to “agree a co-investment plan to support the industry, taking a public stake where necessary, to protect vital offshore infrastructure”.

The motion, which has been put forward by the Aberdeen South and North Kincardine branch, also calls for action from ministers to “maximise the opportunities from future decommissioning”.

Latest official figures show North Sea oil has posted a loss for the taxpayer for the first year in its history.

The Treasury put £24million more into investment and decommissioning than it got back in petroleum revenue tax (PRT) in 2015/16.This could see both platforms and pipelines bought up and brought under state control.

It is the first time the oil balance sheet has been in the red since records began in 1968/69.

Labour North East MSP Lewis Macdonald claimed the party had put “forward a positive plan to secure the future of our oil and gas industry”.

He said: “By supporting this motion, Scottish Labour will reaffirm its commitment to protecting the north-east’s reputation as the energy capital of Europe.

Government intervention could ensure that the North Sea taps are not turned off prematurely.

“As well as protecting the jobs of today, we will also fight to ensure Scotland has a comprehensive decommissioning strategy so the North Sea can continue to deliver jobs for the next generation.”

Mr Macdonald said his party’s stance is “in contrast to the SNP and the Tories, who have been all at sea in their response to the oil price downturn”.

A spokesman for the UK Government’s Department for Business, Energy and Industrial Strategy said: “We’ve already provided extensive support in response to falling oil prices through a £2.3billion package of measures, and committed £40million to new seismic studies to help uncover more opportunities.

“This was only made possible because of the broad shoulders of the wider UK economy.”

A spokesman for Scottish Energy Minister Paul Wheelhouse said: “Labour are also talking nonsense on the issue of Scottish Government support for workers affected by the oil industry downturn.

“Our Transition Training Fund has already directly supported over 1,500 individuals made redundant, in addition to more than 700 further individuals being helped through two formal training procurement rounds.”

He added: “Not only have they made no mention of how they would pay for such a policy, it’s clear that this is not the best way to support the oil and gas industry.

“The UK Government has already granted significant tax breaks to the companies working in Aberdeen and in the North Sea, allowances which should enable further exploration and investment, and see companies hold onto more workers through this difficult time.”

Meanwhile, Mike Tholen of trade body Oil and Gas UK told MPs the industry is holding its head “above water” after last year’s losses.

Giving evidence to the Commons Scottish affairs committee he added: “Hopefully we will be a positive taxpayer this coming year, and for years to come.”

But he warned the price of oil could remain at about US$50 (£40) per barrel “perhaps for many years to come”.

That the Parliament understands that the number of jobs lost as a result of the downturn in the UK oil and gas sector could be over 120,000 by the end of 2016; considers that the sector is of vital economic interest and cannot be left exclusively to market forces; further considers that the sector needs to have confidence that it can invest for the future; supports the use of Scottish and UK Government borrowing powers to leverage money into the sector, including active consideration of strategic public stakes in infrastructure investment, and notes calls on the Scottish Government to facilitate and take part in discussions with the UK Government, industry and trade unions to create a plan for co-investment that will support jobs, including in the north east, increase confidence and create returns to the public sector.

If you are a Unite member and work offshore and wish to attend the debate please contact the Aberdeen Unite office ASAP on 01224 645 271 or e mail offshoreunite@gmail.com

How can you help

Unite has asked every MSP to support a motion by North East Scotland Labour MSP Lewis Macdonald that message has gone directly to Holyrood. It’s already got cross-party support, the debate will be on Thursday 23 Feb

Here’s how you can help – write to your MSPs!

2. Once you’re on the Write to Them website, enter your postcode and click ‘Go’.

2. On the next page – click ‘Write to all your Regional MSPs’ on the right hand side of the page.

3. Ask your MSPs to support Motion S5M-02310. If you work offshore, tell them about any problems or difficulties that you’re experiencing in the industry. Tell them that the industry needs public investment for the future. Use your own words – but keep it short.

4. Fill in your contact details and then click ‘Preview and Send’ at the bottom.

5. Facebook post or Tweet to your MSP asking them to Support the motion or ask them why they are not supporting motion #CoinvestmentNorthSea

Decommissioning seems to be the word on everyone’s lips in the oil and gas sector. Shell’s announcement of plans to remove facilities in the Brent field was closely followed by Nicola Sturgeon’s announcement of a £5 million Scottish Government fund to support decommissioning projects.

With all this talk, some people might be forgiven for having the impression that the days of new exploration and extraction are coming to an end. Unite is clear – that is simply not the case.

We need immediate action to support the oil and gas sector – supporting a roadmap based upon clear principles which deliver certainty for the industry. Genuine co-operation between government, industry and trade unions is vital, to alleviate the pressure on the sector while supporting jobs and protecting employment rights.

As Scotland’s largest offshore union, we have repeatedly called for the UK and Scottish governments to pull together an industry summit which would regularly meet until the crisis abates. In our opinion, support for the industry should include but not be limited to, urgent action on government revenues from offshore oil and gas. The Treasury has a range of taxes that impact on the industry, most notably the Supplementary Charge on Corporation Tax, which reflects the exceptional profits the industry made in the boom years – but the forthcoming years hold little prospect of significant profits or tax receipts from the North Sea.

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The offshore sector cannot be left exclusively to market forces. The sector is of vital economic interest and paramount to the security of supply. There is a national interest to be taken into account. The UK and Scottish governments have been slow in response to the deteriorating situation. The industry needs to have confidence that they can invest for the future, and certainty about the fiscal framework for a sustained period to see it through the current crisis.

While tax changes are a necessary component in the strategy, they won’t be enough to stop the decline. If activity is to be maintained, the industry needs an injection of fresh capital. The Oil and Gas Authority has a strong mandate to maximise production, but we need more imaginative policies – including the use of Scottish and UK government borrowing powers to leverage money into the sector. That should include public stakes in new infrastructure and to support existing facilities.

On February 23 a cross-party motion supporting that approach – put forward by Lewis Macdonald MSP – will be debated in the Scottish Parliament. Our members will be watching that debate with interest. We look forward to hearing what the Scottish Government has to say.

Decommissioning is, of course, a major emerging issue. Unite strongly believes that a coherent plan must be established to ensure as much of the work as possible is retained in Scotland – and the UK. The Oil and Gas Authority is tasked with developing a plan and timetable for developing the infrastructure that will support decommissioning. It is estimated that until the mid-2050s, around 470 platforms, 5,000 wells, 10,000km of pipelines and 40,000 concrete blocks will have to be removed from the North Sea. Oil and Gas UK projects estimates that decommissioning costs through to the 2050s will range between £30 – £60 billion.
However, the Oil and Gas Authority Report titled ‘Decommissioning Strategy’ published in June 2016 says there needs to be, “a clear strategy and a delivery programme, with concerted effort and strong stakeholder commitment across the industry.” Unite supports this objective – because at the moment there is no clear strategy for decommissioning in Scotland. We need one now – and it has to involve the trade unions directly.

The Scottish and UK governments must both intervene in order to explore the opportunities to leverage investment into the decommissioning process, including state borrowing powers to offset a lack of investment by the private sector. That will help address capacity issues and reduce decommissioning costs.

But while planning for future decommissioning, we should not take our eyes off the prize. Our focus must remain on extracting maximum economic benefit from the estimated 22 billion barrels of oil and gas still in the UK Continental Shelf.

The pay offer for 2016/17 has now been formally REJECTED by the trade union members and the COTA employers have been notified accordingly. We will now be discussing the result within our respective union members.

However, the DWP referred Energy Voiceto the Department for Business, Energy and Industrial Strategy (BEIS), which was created last year under Theresa May’s premiership.

A BEIS spokesman said: “The UK government is rightly proud of the oil and gas workers who have been on the frontline of an industry facing unprecedented challenges.

“Where jobs have been lost in the sector, we’re determined to hold on to that talent.

“That’s why we published the Oil & Gas workforce plan and expanded the Talent Retention website to give workers greater access to new opportunities in more than 1,000 engineering and manufacturing companies.

“Businesses should be in no doubt that the oil and gas industry in Scotland has one of the most highly skilled workforces in the world.”

The government spokesman also confirmed receipt of Ms Martin’s letter and said a response would be issued “in due course”.

Over the last two years the UK Government claims to have delivered a package of measures worth £2.3billion to encourage investment in the oil and gas sector and support jobs

The Oil and Gas Workforce Plan was published last summer to redeploy skilled workers to other infrastructure projects and with professions with transferable skills.

Another offshore worker said he was told that he would not be offered a non-oil job amid fears he would up and leave once the price of Brent Crude improved.

Around 120,000 UK jobs associated with the industry are estimated to have been lost since the oil price started to plunge more than two years ago.

Ms Martin has now written to Minister of State for the Department for Work and Pensions, Damian Hinds MP, asking for an investigation.

She wants to know how widespread this discrimination is across the Britain and if it is legal.

Ms Martin, whose constituency is one of the worst affected by the fallout from the oil and gas downturn, said: “I had heard anecdotal evidence of a suspicion of this being the case, while others said they been told outright that employers did not want oil and gas workers.

“But I never saw anything written down until a constituent came to us.

“He had been out of work for 18 months and was trying to find a job outside oil and gas in the health and safety area. He had worked in previous health and safety sectors before doing it offshore.

“At one point he produced an email from a recruitment agency which stated ‘no oil gas workers need apply’.”

Click to enlarge image.

She added: “I could understand if it was particular engineering post, like a civil engineer applying for a mechanical engineer’s position.

“But for health and safety experts I would say that they have transferable skills.”

Ms Martin has raised the issue with her colleague Jamie Hepburn MSP Minister for Employability and Training as well as writing to Mr Hinds, who she has yet to receive a formal response from.

The Aberdeenshire East MSP said: “Effectively what I’m calling for is an investigation into how widespread this is.

“But also a bit of guidance from the UK Government about how acceptable this is.”

She added: “Not only is this not fair, I would suggest that there is a huge skillset of people coming across and that companies are missing out on good, highly trained employees.

“Some of the evidence I’ve had has suggested many employers are not going to employ ex-oil workers because as soon as the oil price goes back up, then off you will go.

“Seeing this in black and white ‘we are not looking for oil and gas workers’ is saying you’re not welcome.”

Energy Voice would like to know more about this claim.
Have you been rejected from a job opportunity because of your connection to the oil and gas industry.
Send an email to alan.shields@ajl.co.uk
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